Instacart workers in San Francisco claim they're being "screwed" by new employee policy

By Dan Raile , written on August 3, 2015

From The Sharing Economy Desk

Last month, the federal Department of Labor issued a “policy guidance document” addressing the misclassification of employees as contract workers.

The memo suggests that federal agencies might begin taking a more active interest in the cadres of independent contractors currently toiling on behalf of the sharing economy. At the same time, a number of lawsuits have been lodged across the country contending that these contractors are actually misclassified employees. A stumping Hillary Clinton described the misclassification as “wage theft.”

The general conceit here is that these contractors yearn for the benefits tied to employee status, and that the increasingly large and well-funded businesses for which they work need their stingy hands forced in bestowing this panacea…

Yet I encountered a very different perspective this weekend in the aisles of San Francisco’s posher grocery stores.

“Go ahead and ask anyone, you’re not going to find anyone here who’s happy about it,” said an Instacart check-out cashier at one store, when I told her of my interest in interviewing the company’s in-store shoppers, who were bustling along the shelves on their last day as independent contractors.

Last week, I reported that Instacart had informed in-store shoppers in San Francisco of the impending status change, giving them only 48 to decide whether to reapply for their jobs. As part-time employees, the shoppers will be held to a 29-hours-per-week maximum; they will receive a flat wage and no longer be eligible for commissions and tips. Nor will they accrue the paid time off, health-care benefits or advanced scheduling guarantees that help make employment an attractive alternative to contracting.

That cashier was right. On Sunday, I spoke to twelve Instacart in-store workers at three different stores, and not one of them had anything nice to say about the new policy. The primary gripes were that they’re taking a substantial pay-cut, facing a significant decrease in hours, and that the change happened so suddenly and without their input.

“Nobody from Instacart showed their face around here until it was time to sign the paperwork,” said one worker. In-store workers were notified of the impending change by email on July 21st. Somel in-store shoppers declined to continue working as employees – some will stay with Instacart as drivers or customer-service personnel, others will be leaving Instacart entirely. Still others applied to retain their jobs, but were denied. And even those sticking with the gig are doing so with hard feelings.

The in-store shopper position may seem like easy work to onlookers. Shoppers get a grocery list on their smartphone, put the order together and then hand it off to a cashier. At several stores, these cashiers also work for Instacart, often at registers reserved for that purpose. But wrapped up in this seemingly-simple job is a highly-competitive game of statistics management that would keep Nate Silver working late. Workers compete against each other for speed and accuracy and struggle to keep their numbers up. If they fail to do so, they see their earning drop off sharply.

For those who learn how best to play the game, this structure has big benefits. Shoppers I spoke to claim to make as much as $35/hour on average. Starting today, they’ll all be making $16/hour, and having their hours cut besides. Since tips and commissions have been eliminated, incentives for hustle and attention to detail also seem to have been removed.

“The best people are getting screwed. But if you’re not that good, you’re happy,” said another shopper. “I understand why [Instacart] is doing it. It makes business sense, and I think they are worried about the Department of Labor coming down hard. But the way they did it, they are just screwing with a lot of people’s lives.”

Instacart’s drivers will still be contractors, so the company may not be dodging the Labor Department entirely. Another aspect of traditional labor – the right to organize, to bargain collectively and basically to have a seat at the table in policy discussions – remains sorely lacking. In the course of my Sunday interviews the complaint I heard most was that the new policy, with its mix of potentially beneficial and detrimental effects, was arrived at and instituted without consulting the impacted workers.

It’s obviously far too early to say whether the new policy will be successful in keeping Instacart’s users and workers happy and further gilding the unicorn’s lone antler. What is already clear is that merely reclassifying independent contractors as employees doesn’t alleviate many of the more troubling aspects of sharing economy labor, and may in fact reinforce them.

This morning, Instacart’s in-store workers across San Francisco awoke to new restrictions and responsibilities in the jobs many have been doing for months. If you don’t like the work conditions in the sharing economy, just wait a few minutes.